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Thursday, November 21, 2013

Market Summary -- 21st Nov 13

FTSE STI closed 3,172.38, down 11.85 points or -0.37% with a total value of S$1.44b and a total value of S$948M. The total number of advance vs decline was 136 vs 271. Of the 30 component index stocks, 3 closed positive, 4 unchanged and 23 in the red. The 3 gainer component stocks were :-

US markets again reversed gain to close all in the red after the US Fed minutes. Asian bourses were mostly down for the day. Nikkei +1.92%, SSE -0.04% and HSI -0.51%. STI fell 0.37% in thin volume and value. Only 3 of the 30 index stocks managed to register positive closing.

The US Fed minutes for last month FOMC meeting indicating a tapering could occur in the coming months and that drove investors to sell again. All along, the US Fed has not changed its stance on tapering and all the fear is nothing but speculative by the markets. As stock prices moved high due to easy money and not fundamental reason, they have every chance to drop when US Fed starts to taper. HSBC released China flash PMI for November this morning coming in at 50.4, a drop from previous month and that piled up the selling pressure further. Nikkei was up helped by the weakening Yen.

Singapore released its 3Q GDP coming in at +1.3% surprising most after the previous quarter of decline. That prompted Singapore Government to raise the FY2013 GDP to between 3.5% to 4.0% from between 2.5% to 3.5%. Unfortunately, the good news did not have impact on STI as investors in general rather focus on the US Fed tapering theme rather than the very basic and mandatory fundamental. That could be good news as this will present opportunity to bargain hunt for value. The selling is always irrational but the buying is rational.